Penn National Gaming is taking action against Pennsylvania and the recent gambling expansion that passed into law.
When a gambling expansion package in Pennsylvania was signed into law by the state governor, it seemed everyone was happy with the outcome. Casinos will soon be able to offer online gaming services, satellite casinos can be created, video gaming terminals can be added to truck stops and so much more included. While it seemed everyone was happy, one company was not. Casino owner Penn National Gaming has been quite vocal about gaming expansion possibilities in the past and now have made their move to challenge the state.
Legal Challenge Begins
Penn National Gaming has now decided to legally challenge the state regarding the new law that will allow for expanded gambling. According to the York Dispatch, the company has asked a Harrisburg federal court to declare the new law as unconstitutional. The company claims the new law is in violation of their constitutional rights based on equal protection and due process.
Just yesterday, the company filed a lawsuit against the state, hoping to see the gaming package deemed unconstitutional. The filing of the lawsuit came just one day before the bidding process for the satellite casinos in the state were to commence. Interested casino license holders could bid today on a satellite casino license, having to bid at least $7.5 million minimum in order to be considered.
Before the Pennsylvania Gaming Control Board could review bids, Penn National had already begun their legal fight. The company wants the court to find that the new satellite casinos will be harmful to their gaming venue, Hollywood Casino of Harrisburg. The Hollywood Casino is actually the only venue that will be close to a satellite casino, possibly, due to its location.
The satellite casinos have to be at least 25 linear miles from an existing gaming venue. The remaining 11 casinos in the state are close to each other so the mileage requirement would place the mini casinos further away. The Hollywood Casino is basically in an area all to its own, so they will most likely be closer to any new satellite casinos.
Penn National feels that the mileage buffer will not be enough to prevent harm. The operator reportedly feels that they will lose out on $34 million a year due to the smaller casinos. This is quite a large sum and would affect the bottom line of the company if that much were to be lost due to the satellite casinos.
The casino operator is also claiming they are being treated unfairly by the state government. Penn National points out in their legal challenge that Mount Airy Casino was provided special treatment as provisions were made to keep the satellite casinos from being added to counties near the facility, including Carbon, Pike and Wayne.
The fight by Penn National is not the first time the new gambling expansion law has been challenged by a gaming operator in Pennsylvania. Back in December, the Sands Casino Resort Bethlehem decided to fire back and asked the Supreme Court to remove the law from the books. The Sands feels that existing casinos will be subject to customer poaching once the new satellite casinos are constructed.
For now, it will be interesting to watch and see if any validity is given to Penn National’s claims. Pennsylvania desperately needs the money that satellite casinos and other portions of the new law provides, so it will not be surprising to find that their challenge is eventually dismissed.